Newsbrands – Need to think BIG
By Adam Hillier
The appointment of Tracy De Groose as Executive Chair for Newsworks indicates that the sector is still fighting to find its place in the ever-evolving market place.
Whilst the GAFA (Google, Apple, Facebook and Amazon) continue to have a detrimental impact on newsbrands’ ad revenues, the last eighteen months has been a testing period for the tech companies as consumer trust continues to wane, ad blocker adoption increases, and privacy issues all converge. So, is the tide slowly beginning to turn?
Newsbrands have fought back in recent times by focusing their efforts on driving incremental revenue streams. Leaders in the sector are feeling upbeat and non-advertising revenues have become a high priority as evidenced by The Telegraph’s and The Times’ success with their subscription models and Guardian Media Group’s impressive turnaround strategy.
However, newsbrands must think big rather than tinker around the edges, because whilst these business models will allow newsbrands to continue to exist, for now, they won’t enable them to win longer term. Tom Knox, Executive Partner, MullenLowe and former President of the IPA, highlights that “newsbrands still have a lot to play for. However, in the context of margin dilution, revenues should not be sustained by employing opaque media practices”.
I believe that newsbrands have an opportunity to change the paradigm if they play to their strengths and focus on the needs of the audience and brand integrity.
We spoke to over 450 C-Suite decision makers, with the vast majority indicating that newsbrands lack confidence, are too introspective and traditional. In fact, 64% of these executives have a negative perception of the industry. Advertisers are largely unconvinced by the proposition, partly because marketing as a collective is incoherent, and deep relationships have not been cultivated at the most senior levels with clients direct. There exists a great opportunity for newsbrands to educate the market about the progress that is being achieved and better articulate the value that newsbrands provide to clients, agencies and audiences. Newsworks can become a key enabler by broadening its audience (and that of the newsbrands) and driving more value from the great content, editorial, and creative work that it produces. As Tracy de Groose states, “It needs to get better at storytelling”.
Repositioning newsbrands and raising the collective profile will help to create more positive sentiment, particularly at a time when the tech companies are coming under attack and facing challenges around: brand safety; GDPR/cybersecurity; new social norms towards personalised content and tighter channels of communication; and shifting consumer strategies centred on engagement. Newsbrands’ can compete effectively across these crucial areas and offer advertisers brand value, scale and effectiveness. Moreover, the relative transparency of newbrands versus Facebook and Google should be leveraged as a competitive advantage. The increased scrutiny over tech companies, and reduced tolerance from advertisers, has contributed to the comparative rise in perception of newsbrands.
The recent move away from open exchanges, as clients’ need for brand safety is heightened, plays into the hands of newsbrands quality proposition. Furthermore, as trust in newsbrands has increased so has people’s propensity to pay for journalism. Newsbrands have a very clear opportunity to steal a march at this juncture: by leveraging the editorial capability, using influencers, and focusing on building deep communities, greater levels of trust, engagement and commercial benefit can be derived.
There is also a strong perception that newsbrands are enemies. As one CEO points out “newsbrands need to collaborate as an industry rather than being a set of rivals”. The internal politics are stifling positive transformation at the pace required for newsbrands to become truly competitive. Collaboration should be viewed as the new data. As European publishers collaborate on joint consumer login systems to win the fight on fake news, lower front-end costs and enhance customer experience, UK newsbrands can also gain competitive advantage from a more joined up approach. Afterall, the newsbrand market is moving in that direction. Digital has created a shift from tribal readership to a more repertoire read – according to a 2018 Reuters Report the average number of newsbrands read per week stands at 4.5 – providing the opportunity for newsbrands to articulate a more coherent narrative to clients that focusses on scale and engagement. Whilst there will always exist a competitive tension, collaboration and competition need to co-exist and individuals need to work out how to operate effectively in that world.
Progress is being Made
The market is largely misguided about the level and pace of change within newsbrands, particularly around digital and technological advancements. Despite collaborations across the sector (namely The Ozone Project, PATS, PAMCo) and acquisitions in high growth tech businesses, exemplified by News UK’s growing portfolio and dmg ventures’ focus on minority and early stage investments, the perception remains that not enough is being done.
To make a profound impact will require a unified approach and a meaningful commercial value to be placed on the content they produce. Newsbrands also need to continue to find new ways to work with the GAFA and with new platforms to level the playing field and regain control over the supply chain.
The Time is Now
The appointment of an Executive Chair at Newsworks is a hugely powerful signal that the industry is seeking to change the negative perceptions and redefine newsbrands’ place in the market. To succeed, the industry needs to “Think Big” and “collaborate” and from speaking to over 450 executives within the sector this may be as much about self-belief and cultural change as anything else.
For a discussion about any aspect of leadership, please contact Adam Hillier on 0203 940 6446 firstname.lastname@example.org